eMudhra (EMUDHRA) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of a 51% controlling stake in Cryptas International GmbH expands digital trust footprint in the EU, leveraging eIDAS accreditation, regulatory expertise, and an established customer base.

• Enhances solutions portfolio with qualified electronic signatures, identity management, and secure authentication.

• Complements existing global footprint in the Middle East, Africa, and the USA, filling a key regional gap.

• Enables cross-leveraging of technologies for innovation in compliance and digital identity.

• Provides a robust platform to scale operations within the EU and strengthens credibility in regulated industries.

Financial terms and conditions

• Immediate cash consideration of €5 million (or $5 million) for the 51% stake, plus an upside based on a 10x EBITDA multiple for 2026.

• Put/call option for the remaining stake (10% or 49%) between 2028-2030 at the same 10x EBITDA multiple or minimum 1x revenue.

• Initial 51% stake paid in cash; remaining stake can be paid in cash or share swap at acquirer's option.

• Cryptas currently generates approximately EUR 9.7-9.8 million in revenue.

• Minimal debt, with some mezzanine capital from the promoter included in the equity valuation.

Synergies and expected cost savings

• Ability to replace third-party CA solutions with in-house products, generating immediate savings and incremental revenue of about $1 million annually.

• Significant cost reduction potential by offshoring low-end and operational work to India, targeting improved profitability.

• Employee costs currently account for 55-60% of total costs, offering substantial outsourcing opportunities.

• Combined strengths expected to accelerate innovation in digital identity, compliance, and secure digital transformation.

• Supports growing demand for paperless, secure, and legally compliant digital workflows.